KUALA LUMPUR: Westports Holdings Bhd's core net profit for the first quarter of 2024 (1Q24) has beaten Affin Hwang Capital's expectations.

Westports' 1Q24 core net profit grew by 14 per cent year-on-year (yoy) to RM205 million on higher operating revenue (+Up 7.0 per cent) and flattish operating costs.

"The results beat our expectations due to lower-than-expected operating costs," Affin Hwang said in a report today.

"All in, the results were within consensus but ahead of our expectations - 1Q24 core profit accounts for 25 per cent of the consensus full-year forecast and 27 per cent of ours."

Affin Hwang noted that operationally, Westports' 1Q24 container volume grew by 5.0 per cent yoy driven by higher gateway volume (+16 per cent).

Transhipment volume fell by 3.0 per cent yoy. 

"Management maintained its guidance for low-single digit volume growth for 2024," it added.

Affin Hwang raised its 2024-2026 earnings per share (EPS ) forecasts by 4.0-6.0 per cent and lifted its target price to RM4.15 from RM3.80). 

The firm maintained its "Hold" call due to uninspiring 2024-2025 earnings outlook and potential competition from Carey Port and Thailand land bridge.

"While we like Westports for its strategically located assets and well-conceived expansion plan, investors' concerns on potential competition from Carey Port/Thailand land bridge project, and its uninspiring 2024-2025 EPS outlook may cap share price performance," it said.